Zune revenue drops $100 million versus previous year

It looks like no one is getting out of the recession unscathed, not even Microsoft.

Following news of some heavy restructuring in the gaming department, Microsoft has announced that revenue for its portable media player, Zune, has declined by $100 million this last fiscal quarter. That's a 54 percent drop from the same quarterly period the previous year.

Not that the company is in any immediate danger, with some cushy holiday sales figures backing up the Xbox 360 and its software.

Apple, on the other hand, reported a three percent increase in iPod sales.

Better to pull out sooner, than lose a whole lot more later. And Iâm not just talking about revenues; Iâm talking about reputation.

Compared to the iPhone and the iPod touch, the Zune sucks, and everyone knows it. I donât care how many testimonials I read from so-called Zune owners. The fact that the Zune owns aroud 3% of the market versus 70% market share for the iPod should be enough suggestive evidence to quiet the squawkers. But it isnât. So be it.

The Zune is so late to the game that Microsoftâs own music download store is hobbled by DRM restrictions, something Apple has recently persuaded the record companies to drop. This is the same DRM that every Kool-Aid drinking, anti-Apple freak complained about.

So, my question to all you misguided Microsoft miscreants is this: How do you justify Microsoftâs DRM-straddled music store?

Please. Donât even answer. Iâm so tired of Microsoft apologists, continually posting love letters about failed products. âI love Vista! Itâs the best OS Iâve ever used!â Yeah. That worked out well. Even the CEO/Chief Priest of the Church at which you worship told you it was a failure, and you continued to kneel down in submission. You people should be living in the Middle East, where unfounded beliefs are taken as fact, and misguided behavior is taken as the norm.

Reputation with who though? With corporate environments? With OEM's? HP doesn't care if the Zune tanks, Engineering labs don't care if the Zune tanks. What you're talking about is their entertainment division which has had a long standing reputation for struggling since it started. Kind of hard to pull out of something that already has a mixed image especially when the only thing you can deliver is an impression of cutting and running.

Compared to the iPod touch (Unless we all missed the memo where the Zune doubles as a smartphone) it lacks in being some magic all in one solution. Honestly that's all up to the consumer though on what their needs are, you'll be hard pressed to beat your standards down upon others as what they need. For me I just want something that plays music, period. I don't need a phone/music/video/internet/game/etc device that can barely multitask. I'd rather have dedicated devices to do the job right, as such most things on the market are overkill to me and always will be. There's no "OMG CSI WILL BE SO MUCH BETTAR ON UR IFONE" to be had, if I want to watch TV I'll watch TV, or I'll stream it through Hulu onto my TV. Also do note your timeline in general, we know Apple sells at the top of the DAP list but it's helpful to note what year your figures start at as well, unless you wanted to look sloppy.

The Zune got blasted from the start because their own Play system (Playsforsure I believe) had compatibility issues with the Zune rendering those songs incompatible, given that Apple barely got with the program (amazon) and dropped DRM in their latest announcement I wouldn't go around championing them around as some bastion of hope, both of them are terrible and I would rather unrestricted MP3's and the ability to drag and drop my folders onto my player instead of all the voodoo that both of them bring into the mix. It's annoying and frankly I wish MS and Apple would drop it. I guess I wonder how Apple justified it for so long given that they actually have had market influence for ages with their own private acquisitions. Being rhetorical only works when you have a point, in this case you're being blind to your own master and ignoring the fact that all of these companies are broken.

The only one who should be moving it seems is you, up to the Apple HQ with your tent and get well sign for Jobs hoping that he brings you your next material purchase to make you feel good inside.

I donât doubt that many or even most Zune owners are satisfied with what they have. Hereâs my thing: Apple dove into the MP3 market when that market was already well on its way to maturity. The iPod quickly made a big splash, and iTunes has played no small part in helping the iPod acuire a 70% market share. Apple did not engage in illegal, monopolistic business practices in order to achieve that level of prominence; nor did Steve Jobs hypnotize buyers, steering them towards the iPhone.

When the iPhone was released in October of 2001, it succeeded during a recession caused by the terrorist attacks of 9/11. If the current economic climate adversely affected the Zune and other consumer products, then it stands to reason that it also adversely affected iPod sales. Yet, Apple reported a growth in iPod sales for the most recent quarter, versus a 54% drop in Zune revenues. How much better would the iPod have faired this quarter without the deepening recession?

I believe that Microsoft and its investors need to re-evaluate the Zune with regard to how it affects other products, and how it affects shareholder interests. If Iâm a Microsoft competitor â and I donât believe that Apple and Microsoft compete in the sense that they appeal to very different groups of customers â then I truly hope that Microsoft continues to throw money and other resources at the Zune.